Amazon chief Jeff Bezos arrived in India, one of the biggest markets for the American e-commerce giant, on Wednesday for a three-day trip. However, not everyone is looking forward to the world’s richest man’s India visit. The umbrella body of small traders, whose businesses have been severely impacted by the rapid adoption of online retail across the country, are protesting in major cities against Bezos’ trip.
The Confederation of All India Traders (CAIT) has seven points under its mission listed on its website. The second mission statement reads: “To communicate with administrators concerned to seek redress of legitimate grievances of traders.” True to its statement, CAIT has been raising objections about the practices of major e-commerce players in the country for the past many months.
Amazon and Walmart-owned Flipkart have been major CAIT peeves, owing to the huge market share the two American-owned giants enjoy in the Indian market.
'Mala fide business practices'
A day before Bezos’ India landing, Praveen Khandelwal, the secretary general of CAIT, reiterated that around seven crore traders and their families have been "extremely adversely affected due to the predatory and mala fide business practices of Amazon and Flipkart".
Calling for a strike by traders, he added: "The visit of Jeff Bezos, Amazon Founder tomorrow [Wednesday] to India will be greeted with strong protest from traders across Country in about 300 cities. The protest at New Delhi will be held at Jantar Mantar.”
Previously, CAIT has alleged unfair trade practices, including deep discounting that have systemically eaten into small traders’ business and profit.
On Monday, fair market watchdog, the Competition Commission of India
(CCI) ordered an enquiry into the operations of both Amazon and Flipkart on multiple counts, including deep discounts and exclusive tie-up with preferred sellers. Finding merits in the allegations, the commission has asked its director general (DG) to complete the investigation in 60 days from the receipt of the order.
However, both the American giants appeared unfazed by the CCI’s order, issuing statements that espoused confidence in their compliance.
"We welcome the opportunity to address allegations made about Amazon. We are confident in our compliance, and will cooperate fully with CCI," said an Amazon India spokesperson.
A Flipkart spokesperson said: "We are currently reviewing the document. The Flipkart group is fully compliant with all applicable laws and FDI regulations. We take pride in democratising e-commerce in India and giving market access to lakhs of MSMEs, sellers, artisans and small businesses, making quality and affordable goods available to consumers through our transparent and efficient marketplace while creating lakhs of jobs."
CCI’s findings are some time away.
Support from Swadeshi Jagran Manch
CAIT’s cause has also been championed by the
Swadeshi Jagran Manch (SJM), the economic wing of the Rashtriya Swayamsevak Sangh (RSS) which is the ideological parent of the ruling Bharatiya Janata Party (BJP).
SJM has also been critical of several government measures from
privatising state-owned companies to the possibility of India becoming a signatory of the China-led Regional Comprehensive Economic Partnership (RCEP). Incidentally, India backed out from signing the partnership at the last minute in 2019.
The SJM has also lobbied against Amazon and Flipkart, urging the government to regulate the e-commerce market.
“The e-commerce companies including Flipkart and Amazon continue to circumvent laws detrimental to the interests of the traders namely small shopkeepers, book sellers, medicine shops and others. India should have a robust e-commerce policy to protect the interests of 13 crore people engaged in retail trade and crores of people in small and medium industries,” SJM’s co-convener Ashwani Mahajan said at a function last January.
Bowing to the internal pressure, the government introduced stringent rules for e-commerce players, one of which barred the platforms to sell products from companies in which they held a stake.
Due to the ban on foreign direct investment (FDI) in online retail, e-commerce platforms acted as marketplaces that connected businesses with buyers, but the American giants found a way past this regulation. Flipkart with its WS Retail and Amazon through Cloudtail sold products on their own platforms, circumventing government rules. However, the government’s decision forced a restructuring of ownership. Amazon reduced its share in Cloudtail from 49 percent to 24 percent.But the business has continued apace.